To be sure, there are a handful of lawyers who abused the litigation system for their own personal gain, by doing such things as hiring professional plaintiffs and filing suit without first investigating the facts.  Some of those lawyers sit in prison cells today, where they belong.  Those bad actors represent a small fraction of those of us who bring cases to address clear wrongdoing that ruins the lives of innocent investors.

The fact is that private litigation is the cheapest form of regulation.  It does not cost the government a dime, and most often targets wrongdoers who escape scrutiny of state and federal regulators.  And, private litigation has its own built-in controls to prevent abuse.  Since most investors are represented on a contingency fee basis, it behooves investment fraud lawyers to study their cases carefully before filing them.  The reason is simple:  if they don’t win, they don’t get paid. 

Yesterday we learned that the government is proposing a $700 billion bailout of financial institutions which have used investor money to make poor bets that enriched stock brokers, mortgage brokers, brokerage firms, and their executives.  Litigation reform is not the only reason why this happened.  But the laissez faire attitude of deregulation certainly contributed to it, and litigation reform was a piece of that package.  Now that our government is forced to leave the taxpayers holding the $700 billion bag for Wall Street failures, it is time to recognize that greed powers Wall Street.  Individual investor rights need to be strengthened to include mandatory attorney fees and punitive damages in egregious cases.   Let’s call an end of the efforts to dismantle investor rights.